House to Vote Friday on 1-year Extension of Student Loan Rate

TOBY JORRIN/AFP/Getty Images(WASHINGTON) — House Speaker John Boehner announced Wednesday that the House of Representatives will vote Friday to extend the current student loan interest rate of 3.4 percent for one year, just months before current law is set to double the rate, but the House GOP would do it by taking money away from the president’s health reform law.

President Obama on Wednesday wrapped a two-day campaign swing through battleground states where he focused on the need to extend the lowered loan rates. He got support from Mitt Romney, but Republicans in the House insist that the $6 billion cost of lowering the rates is offset and not added to the deficit.

“We will pay for this by taking money from one of the slush funds in the president’s health care law,” Boehner, R-Ohio, said as he explained how the cost of the bill would be paid for. “This is this prevention of public health slush fund that was put into the bill by one of the senators from Iowa, I believe.”

Where would the money for continued low student loan rates come from? The Prevention and Public Health Fund, as it will be formally titled, was established in the Affordable Care Act for prevention, wellness, and public health activities authorized in the Public Health Service Act. It is administered by the Secretary of Health and Human Services, with the secretary owning full discretion on how to distribute funds from that account.

A senior GOP explained that the Student Interest Rate Reduction Act would take back some funds from the provision and apply them as a stopgap measure. Five billion dollars has already been used from fund to pay for the Middle Class Tax Relief and Job Creation Act of 2012, which extended the payroll tax credit and unemployment insurance.

Boehner blamed Democrats for passing the law in 2007 when they controlled both chambers of Congress, and questioned why the president is working to make the interest rate a campaign issue, considering both Republicans and Democrats agree that the rate should not go up.

“Back in 2007, Democratic-controlled Congress put in place a law that would double student loan interest rates this year, and Republicans and Democrats on both sides of the aisle here at the Capitol have long agreed that this was a problem that must be addressed,” he said. “This week the president’s traveling the country on the taxpayer’s dime, campaigning, and trying to invent a fight where there isn’t one. And never has been one on this issue of student loans. We can and will fix the problem without a bunch of campaign-style theatrics.”